After a year-long inquiry, the ACCC has found that childcare markets under the current regulatory settings are not delivering on key policy objectives for all households and communities, including in relation to accessibility and affordability.

The ACCC has recommended consideration by government of potential changes to childcare policies, such as a market stewardship role to oversee and monitor outcomes in childcare markets and respond when they are not achieved, together with the use of supply-side subsidies.

The report makes eight recommendations and 31 findings, which are based on detailed analysis of cost and pricing data and extensive engagement with and feedback from childcare providers, educators, parents and guardians.

The report found that affordability of childcare services improved immediately following the Cheaper Child Care reforms that took effect in July 2023.  Those reforms reduced out of pocket expenses or all types of care, and for households across the income spectrum. The reduction was proportionately largest for the lowest income decile group, although low income households still spend the largest proportion of their disposable income on childcare.

The report also found that previous affordability benefits from changes to the Child Care Subsidy were quickly eroded by fee increases.